The rise of cryptocurrencies causes much speculation with governments raising questions about the future of the currency while others consider launching national e-currencies. Cryptocurrencies are de-centralized, and are not regulated by the monetary authority or a central banks of various in each country. Without a single unanimous way to regulate them, governments across the world are passing legislation to control them. Some government regulations permit payments and trade in cryptocurrencies, while others have banned them.
How have countries embraced cryptocurrencies?
Apart from USA, cryptocurrencies are stored, traded, or used to shop in countries like Japan, Australia, South Korea, and Germany. Bitcoin is the oldest of cryptocurrencies and has been around for over a decade. It was warmly welcomed by the Japanese government from inception with special regulations created. Over 60% of the national currency is held in bitcoin, the largest market share. The second. Biggest market share of bitcoin is stored in US dollars, and the USA has cryptocurrency-based companies in its economy. The German government does not consider cryptocurrencies as legal tender, but is used as a currency substitute and trade and investment in bitcoin and other cryptocurrencies are permitted. In many counties, like Australia, cryptocurrencies are fixed assets (property) and subject to Capital Gains Tax. But cryptocurrencies are not legal in quite a few countries and have either banned them or have restricted their trade and use. Five notable countries where they treat cryptocurrencies as illegal tenders are;
China allowed cryptocurrency trades initially
China had many large cryptocurrency exchanges being the most populated country in the world. Cryptocurrencies were banned in 2017, with Chinese authorities introducing blockchain technology into financial institutions for transparency and transaction tracking. About 80% of cryptocurrency mining is in China due to cheap resources. China will ban mining and launch a national cryptocurrency which could soon lead to lifting China’s ban on cryptocurrencies.
Bolivia continues to prohibit the use of cryptocurrencies
Bolivia is reluctant to allow cryptocurrencies due to rising criminal activities internally. A secret pyramid scheme using cryptocurrency investments was discovered and condemned. This prompted the Central Bank of Bolivia reiterate prohibiting the use of cryptocurrencies is prohibited.
Colombia fears criminal activities
Operating cryptocurrencies in Colombia is illegal, though it is an important Fintech economy in Latin America. Companies risk losing access to financial services if they illegally handle cryptocurrencies. However, most new start-ups focus on cryptocurrency and blockchain and face an uncertain future. A recent attempt to regulate the industry in 2018 was rejected by the Colombian Senate. The plan sought to impose a 5 % cryptocurrency tax on each transaction, but fear of criminal activities and pyramid schemes worry lawmakers the most.
Russia contemplates banning issue and sale of cryptocurrencies’
It is partly legal to trade in cryptocurrencies in Russia, but cannot buy goods and services. Russia is to pass a bill on digital assets and also ban the issue and sale of cryptocurrencies. According to authorities in Russia, the financial instability made possible by digital currencies is worrisome. Consumer protection and prevention of money laundering are both vital to the economy.
Cryptocurrencies are officially banned in Iran
The Central Bank of Iran banned the acceptance of cryptocurrencies in transactions, long back due to fear of terrorism and money laundering, but also to control the fall of their quickly devaluating currency.